RP-Sanjiv Goenka Group firm Phillips Carbon Black Ltd (PCBL), which saw exports to total sales drop by 200 basis points yoy in FY21, is hopeful of “substantially scaling up volumes” in the international market.

The company witnessed higher volume sales in exports in Q1FY22.

Exports to total turnover came down to 26 per cent in FY21 versus 28 per cent in FY20. PCBL’s total turnover dropped 18 per cent in FY21 to ₹2,659 crore. Topline was impacted due to lower production on account of the pandemic-led lockdown during Q1FY21.

In volume terms, exports were down by nearly nine per cent at 1.06 lakh tonne in FY21, compared with 1.16 lakh tonne in FY-20, PCBL said in its latest annual report.

According to Kaushik Roy, MD, PCBL has invested in establishing a supply chain network in overseas markets. In terms of capability, the company would be able to substantially scale up volume in the international market once its greenfield capacity in Tamil Nadu is commissioned.

“In Q1 FY22, when domestic demand was impacted due to regional lockdowns, the company could swiftly shift higher volumes to the international market. The international sales volume in the quarter was 34 per cent,” Roy said responding to an e-mail questionnaire sent by BusinessLine .

The company’s global footprint spans over 45 countries. It has offices in Belgium, China, South Korea, Japan, Germany and Vietnam, among other countries. It has a strong network of distributors which helps it penetrate “deeper across geographies and explore new opportunities”, the annual report said.

Greenfield capacity

PCBL, which produces around 603,000 tonnes of carbon black annually, has commissioned a greenfield project of about 150,000 tonnes per annum for manufacturing of various grades of carbon black and green power plant, spread over 60 acres of land in Tamil Nadu. The project is in progress and is likely to be commissioned by Q3 FY23, he said.

The company has four plants at Durgapur (West Bengal), Palej & Mundra (Gujarat) and Kochi (Kerala). It also has an R&D centre in Asia and Innovation Centre in Europe. The proximity of the plants to sea ports helps keep down logistics costs both within India and abroad.

PCBL has also commissioned two specialty black lines at Palej, Gujarat for production of a wide range of specialty black grades totalling about 32,000 tonnes per annum to service the growing needs of its customers.

Strong demand

According to Roy, the mid to long term demand growth scenario looks very positive for both carbon black and specialty black given the change in global trade scenario and focus of the Indian government on manufacturing sectors.

Automobile OEM recovery driven by improving industrial activities, increasing consumer preference for personal mobility and replacement demand led by restriction on tyre imports should drive healthy growth in tyre segment and therefore carbon black demand.

At the same time, improving end-user demand driven by consumer goods, automobile, construction, electronics, healthcare and pharma industries will grow specialty black segments such as films, fibers, plastics, conductive, ink and coating among others.

Moving forward, the company plans to identify emerging carbon black technologies with new applications and also develop specialised rubber grade carbon blacks for specific applications. Plans are also afoot to enrich the product portfolio of specialty grade carbon blacks.

“Both performance chemical and specialty segments put together, the value-added portfolio share is 35 per cent of total sales volume. The company has built up capability in new product development driven by R&D and process innovation in recent years and with the support of improving market demand both in India and international market, the share of the value-added portfolio is going to witness good growth,” he pointed out.

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